Fog Rolls In On Thursday To Cool Markets Off

The fog rolled back in last night as predicted in The City (San Francisco). The cooling off was welcomed as it helps one sleep here and allows for a slow way to roll into the day.

Today’s markets seemed to be in concert too as its own fog rolled in in the form of fear that US-China trade wars escalation coupled with negative macroeconomic reports that included a 21.8% drop in Pending Homes Sales in April, which served to be a wet blanket throughout the day and the markets sold off into the close. Today China approved the tightening of its hold over Hong Kong and as a result, The White House is holding a press event tomorrow, Friday, where many believe that further sanctions on china will surface. Stay tuned.

On the coronavirus front, we continue to see growth as we now have a reported 5,763,122 confirmed cases of COVID-19 in the world with 2,389,735 cases that have recovered and more than 358,235 worldwide deaths. In the US, we have 1,751,759 confirmed cases with 376k that have recovered with now over 100k deaths (102,659). Today, Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in areas of significant unmet medical need with a current focus on breast cancer and COVID-19, announced that it has begun the development of a second COVID-19 program using its proprietary drug candidate AT-301, to be administered by nasal spray as is teaming with nasal spray specialist firm Summit Biosciences. AT-301 is Atossa’s proprietary formula intended for nasal administration in patients immediately following a diagnosis of COVID-19 but who have not yet exhibited symptoms severe enough to require hospitalization. Atossa confirmed that it is intended for at-home use to proactively reduce symptoms of COVID-19 and to slow the infection rate so that a person’s immune system can more effectively fight SARS-CoV-2 (coronavirus). Atossa also intends to conduct testing to determine whether AT-301 can be used as a prophylaxis to prevent or mitigate SARS-CoV-2, with the goal that it could become a “bridge to the vaccine” and be useful in the next phase of the coronavirus pandemic. Shares of ATOS closed $2.27/share after spiking to an intraday high of $2.55/share on 1.54M shares of trading volume.

Today, the S&P 500 closed down .21% but still above its 200-day MA of 3000 as the energy sector down -2.9% and the financials sector down 1.6% led the decline. The Dow lost .58%, the Nasdaq ticked down .46%, & the Russell 2000 reversed dropping 2.48% after being hot the first two days of this week. 

Oil prices got back to its recent winning ways moving up 2.7% closing at $33.68/bbl. Chevron (CVX) closed at $90.87/share down 3.23%, Exxon (XOM) closed at $45.04/share down by 2.6% & Occidental Petroleum Corporation (OXY) closed at $13.64/share down by 5.41%. 

The popular FAANG stocks lagged again for the most part and closed as follows: Facebook (FB) closed at $225.46/share, down by 1.61%, Amazon (AMZN) closed at $2,401.10/share, down .39%,  Apple (AAPL) closed at $318.25/share up by .04%, & Netflix (NFLX) dropped 1.54% closing at $413.44/share, & Alphabet (GOOG) closed at $1,416.73/share down by .08%.

The 2-yr US treasury yield ended flat at .17% for the third day in a row & the 10-yr yield rose 3 basis points to end at .71%. The U.S. Dollar Index weakened by .6% to end at 98.5. 

Gold prices ended at $1,719/oz (+6) while silver prices closed at $17.92/oz (+.24). North American silver and gold producer Hecla Mining Company (HL) closed at $3.15/share down 3.67% while First Majestic Silver (AG) lost 1.69% closing at $9.31/share.

The macroeconomic schedule brought forth the following reports today:

• The Initial claims for the week ending May 23 confirming a drop by 323k to 2.123M while continuing claims for the week ending May 16 dropped by 3.86M to 21.052M. 
• The New orders for durable goods report confirmed a drop of 17.2% month/month in April 
• The second estimate for Q1 GDP revealed a downward move to -5% while the GDP Price Deflator was revised slightly upwards to 1.4% 
• The Pending Home Sales report confirmed a whopping 21.8% decrease in April

MOVERS

Another reopening play jumped today as follows:

Shares of retailer Dollar Tree (DLTR) closed at $97.64/share up 11.55% after reporting quarterly earnings that sizably beat the street’s estimates They delivered strong same store sales with a 15.5% increase coupled with a 230 basis point improvement in operating margin.

Tomorrow’s significant economic data report schedule will provide the following:

• The Personal Income and Spending report for April
• The revised University of Michigan Index of Consumer Sentiment for May
• The Chicago PMI for May
• The Advance International Trade in Goods, Retail Inventories, and Wholesale Goods report for April

WATCH LIST

• Keep an eye on INVO Bioscience (INVO) which was recently funded and saw their 1-20 reverse split take effect today and will be trading under the symbol INVOD for the next 19 days. They now have ~7.8M shares in this newly minted low or tight float play.

• I am also looking for Atossa Therapeutics (ATOS) to possibly hit us with further news regarding their now 2 COVID-19 treatment programs next week. Recently ATOS announced the successful results from in vitro testing of AT-H201, Atossa’s proprietary COVID-19 drug candidate and i would expect them to follow through with the 

Economic Reports

• On Monday, it was Memorial Day so now reports surfaced.
• On Tuesday, we received the following reports:
  • The New home sales report confirmed an increase by .6% month/month on lower selling prices to a seasonally adjusted annual rate of 623k and on a year/year basis new home sales are now down 6.2%.
  • The Conference Board’s Consumer Confidence Index came in at 86.6 for May and increasing from April as reopening measures tick forward
  • The FHFA Housing Price Index for May confirmed a rise by .1%
  • The S&P Case-Shiller Home Price Index jumped 3.9% year/year in March
• On Wednesday, we received the weekly MBA Mortgage Applications Index that confirmed a rise by 2.7%

Investing & Inspiration

“I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates

“Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman

“The tax on capital gains directly affects investment decisions, the mobility, and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy

“If all the economists were laid end to end, they’d never reach a conclusion.
-George Bernard Shaw

“The riskiest thing we can do is just maintain the status quo.
I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” Bob Iger, Ceo of Disney

“There are old traders and there are bold traders, but there are very few old, bold traders.”-Ed Seykota

“Let this scenario play out on its own, in its own fashion. As you watch it unfold, you will soon be grateful that you choose the peaceful path. Remember — those who live by the sword, die by the sword.”

“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” -Jim Cramer

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” -Mark Cuban

“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.” -Philip Fisher

“I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.” -Richard Dennis

“The four most dangerous words in investing are: ‘this time it’s different.” -Sir John Templeton

“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” -Arnold Schwarzenegger

Tomorrow

Tomorrow’s significant economic data report schedule will provide the following:

• The weekly Initial and Continuing Claims report
• The Durable Goods Orders Report for April
• The second estimate for Q1 GDP
• The Pending Home Sales for April